I was wondering if Mathew or someone who knows this site well could explain the effects of compounding in the context of how it is built in or not built in to the given returns. For example I am currently trading a system called “Turbo Trader”. As I understand it, the system creats aprox $30,000 annual return per contract. And one only needs about $10,000 to start trading one contract acordng to the C2 website. Now in reality if one was happy with the system they may want to trade a second contract if and when the account size hit about $20,000. This would greatly increase the return on investment.
So to make my question short, does the C2 returns expect one to take out profit or roll it into the system?
Can someone please clarify?
I believe system vendors use the initial hypothetical $100K bank given to them by C2 to start with, and trade that any way they like without any specific rules dictated by C2. Many adjust the number of contracts traded to be the maximum allowed for the existing equity balance, and increase this if the account grows in order to utilize the maximum amount of C2 play money.
It is the subscriber’s job to look at the total equity a system has at any given time vs. the number of contracts it is trading (or dollar amount of stocks, forex, etc.), to work out the leverage being used and whether there is any rational money management (among many other things) taking place to make the system viable for realistic real-world trading.
whether there is any rational money management (among many other things) taking place to make the system viable for realistic real-world trading.
Whether a system is using any rational money management or not is reflected in the overall Realism Factor (RF) for each trade and the overall RF for the system.
If a system does have respect for reality, it would adhere to the demands of reality; the “respect for reality” is thus institutionalized, though such a respect cannot be compelled - and men’s evaluations are set accordingly.
Hi Steven.
I am the authour of Turbo Trader.
This applies to all system trading.
If you make enough money to trade a second contract, you are better off to diversify into a different system, or varient of the same system.
There are numerous other systems / varients on my web page.
http://trademaid.info/systems.htm
